Japan Trade September 2016

Japan: Strong yen continues dampening trade in September

October 24, 2016

In September, nominal exports valued in yen declined 6.9% from the same month last year, which followed August’s 9.6% decline. Although the fall was softer than the 10.4% drop that market analysts had expected and the smallest drop in six months, it represented the twelfth consecutive decrease in exports. Exports in volume, however, expanded at the fastest pace in nearly two years, signaling that Japan’s all-important external sector is weathering the strengthening of the yen and weak global demand relatively well.

As a result, the trade balance recorded a JPY 498 billion surplus (USD 4.8 billion) in September. The reading contrasted the JPY 121 billion deficit registered in the same month of the previous year. In the 12 months up to September, the trade surplus rose to JPY 2.7 trillion, which was up from the JPY 2.0 trillion recorded in the previous month and represented the highest reading since May 2011.

In October, core machinery orders, a leading indicator for capital spending over a three- to six-month period, rebounded following September’s sharp contraction, which had represented the steepest fall since records began in 1987.

Industrial production shot up 2.9% on a month-on-month and seasonally-adjusted basis in October, contrasting September’s revised 0.4% decline (previously reported: -1.1% month-on-month)—which came on the back of a wave of natural disasters that hit the country in the month.

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